Techniques of preliminary processing, analysis and interpretation of differential eddy-current transducer measured signal during steel pipeline inspection by the electromagnetic scanning flaw detector “Vikhr” are described. It is shown that the random noise in eddy-current transducer signal over steel pipeline has a broadband spectrum, thus rejection of noise in measured signal using convenient spectral techniques is ineffective. In order to eliminate random noise and nonlinear trend from eddy-current transducer signal the technique based on wavelet transform of signal on the basis of algebraic wavelets is proposed. It is shown that after wavelet transform of eddy-current signal with optimal values of parameters the signal-to-noise ratio (SNR) increases multiple times, lead to improvement of detectability and precision of defect sizes evaluation. Defect sizes are determined by the techniques of minimizing the smoothing functional composed from measured features of defect and theoretical model of defect in steel pipe. In order to provide best precision of defect sizes evaluation the regularization factor in the smoothing functional chosen according to error of measured eddy-current signal. The set of steel pipe defects classification features obtained on measured signals of scanning flaw-detector “Vikhr” differential eddy current transducers and applied during detected defect type recognizing and sizes evaluating is presented. Result of cracks detected sizes evaluation obtained show that they have enough precision to be used in the practice of steel parts and constructions electromagnetic flaw-detection.